This is an English convenience translation of the German ...€¦ · Independent expert report according to §§ 13 f Takeover Act (TA) of the voluntary public takeover offer with

PwC Wirtschaftsprüfung GmbHErdbergstraße 200

1030 ViennaAustriaTel.: +43 1 501 88 - 0

Fax: +43 1 501 88 - 601E-mail: [email protected]

Managing Directors: WP/StB Mag. Friedrich Baumgartner, WP/StB Mag. Horst Bernegger, WP/StB Mag. Dr. Christine Catasta, WP/StB Mag. Liane Hirner, WP/StB Mag. WernerKrumm, WP/StB Mag. Dr. Aslan Milla, WP/StB Mag. Peter Pessenlehner, WP/StB Mag. Dr. Anton Pichler, WP/StB Mag. Gerhard Prachner, WP/StB Mag. Birgit Pscheider, WP/StBDipl.Kfm.Univ. Dorotea-E. Rebmann, WP/StB Mag. Alexandra Rester, WP/StB Mag. Jürgen Schauer, WP/StB Mag. Bettina Maria Szaurer, WP/StB Mag. Ute Unden-Schubert,WP/StB MMag. Frédéric Vilain, WP/StB Mag. Günter Wiltschek, WP/StB Mag. Felix WirthDomicile: Vienna; Company Register: FN 88248 b, Commercial Court of Vienna; DVR: 0656071; VAT number: ATU16124600; WT: 800834PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.

This is an English convenience translation of the German language report.In case of discrepancies the German language report shall prevail.

Independent expert opinionaccording to

§§ 13 f Austrian Takeover Act (Übernahmegesetz)of the voluntary public takeover offer

with the aim of gaining control following § 25a TAsubmitted by Vonovia SE

to the shareholders ofconwert Immobilien Invest SE

Attn.Takeover Commissionc/o Vienna Stock Exchange8/3 Seilergasse1010 Vienna

English convenience translation Page 2 of 30

Content

A. Assignment ...............................................................................................................................4

B. Execution of the mandate and independence...........................................................................4

C. The offer....................................................................................................................................4

D. Assessment of the offer document............................................................................................6

I. Formal assessment of the offer document............................................................................... 6

1. Review of completeness of the offer document.................................................................6

II. Conditions of the offer...................................................................................................... 7

III. Deadlines ..........................................................................................................................8

IV. Transactions in the Target Company’s securities according to § 16 section 2

Takeover Act ................................................................................................................................8

V.Determination of the offer price ..............................................................................................8

E. Assessment of the offer price.................................................................................................. 10

I. Evaluation of the Target Company ........................................................................................ 10

1. Net Asset Value................................................................................................................ 10

2. Stock market price............................................................................................................11

3. Analysts’ assessment ....................................................................................................... 12

4. Multipliers of comparable listed companies (stock market multipliers) ........................ 14

5. Multipliers of comparable transactions (transaction multipliers).................................. 16

6. Limited assessment of the fairness opinion provided by J.P. Morgan ........................... 17

7. Summary ......................................................................................................................... 18

F. Presentation of the company’s bodies .................................................................................... 18

G. Statement of the Administrative Board.................................................................................. 19

H. Explanation of the arguments for accepting or rejecting the Offer........................................ 21

I. Shares held by the Administrative Board of the Target Company .........................................29

J. Assessment of the opinion of the Administrative Board ........................................................29

K. Conclusion of the assessment .................................................................................................30


Abbreviation Overview

Abbreviation Definition

BCA Business Combination AgreementBidder Vonovia SEbn. Billionconj. conjunctionEBIT Earnings before interest and taxEBITDA Earnings before interest, tax, depreciation and

amortizationEUR EUROFFO Funds From Operations IISIN International Securities Identification Numberm MillionNew Vonovia Shares Up to 50,611,212 ordinary shares of Vonovia SE, which

shall be issued by means of a non-cash capital increasefrom approved capital and, if needed, by a cash capitalincrease from approved capital

PwC PwC Wirtschaftsprüfung GmbHTarget Company conwert Immobilien Invest SE, ViennaTA (ÜbG) Takeover Act (Übernahmegesetz)

List of Appendices

Appendix 1: Statement of the Board of Directors

Appendix 2: Insurance coverage Confirmation

Appendix 3: General Conditions of Contract for the Public Accounting Professions (AAB 2011)


Independent expert report according to §§ 13 f Takeover Act (TA) of the voluntarypublic takeover offer with the aim of gaining control submitted by Vonovia SE tothe shareholders of conwert Immobilien Invest SE

A. Assignment

PwC Wirtschaftsprüfung GmbH, Erdbergstrasse 200, 1030 Vienna, Austria (“PwC” or “Inde-pendent expert of the Target Company”) was commissioned on 28 October 2016 by theBoard of Directors upon a decision of the Administrative Board of

conwert Immobilien Invest SE(“Target Company” or “conwert”)

to act as per §§ 13 f TA as an independent expert of the public takeover offer submitted byVonovia SE (“Bidder”) and to advise the company throughout the entire takeover process. Thedelivery of the appointment is a written report in line with § 14 section 2 TA.

B. Execution of the mandate and independence

Our firm is independent in relation to the Target Company, the Bidder or parties acting in con-cert with the Bidder with regard to the appropriate regulations of the TA as well as with regard toour professional regulations.

The required liability insurance coverage, as stated in § 9 no. 2 lit a of the Austrian TA (i.e. athird party liability insurance with an insurance company authorised to carry out business do-mestically, covering the liability risk arising from providing consultancy and audit services) for aminimum of EUR 7.3m for one year is in place (see Appendix 2). The “General Conditions ofContract for the Public Accounting Professions (AAB 2011)”, issued by the Austrian Chamber ofPublic Accountants and Tax Advisors, which are enclosed in this report as Appendix 3, apply inrelation to the execution of PwC's appointment.

The members of the Administrative Board have, by way of signed Letters of Representation, con-firmed they have made available to us the entire information and documentation that is knownto them and relevant for the assessment of the public voluntary takeover offer.

C. The offer

On 17 November 2016 Vonovia SE published a public voluntary takeover offer with the aim tocontrol to all shareholders of the Target Company in accordance with § 25a TA.

The nominal capital in value of approx. EUR 509.5m has been allocated to 101,906,213 non-parshares which have subsequently been distributed to the owners of the Target Company. Eachshare represents a EUR 5.00 stake to the nominal capital. The shares are quoted on the primemarket of the Vienna Stock Exchange.


The main shareholders on the day of the publication of the voluntary takeover offer (17 Novem-ber 2016) were as follows:

Figure 1: Company structure conwert

Source: Austrian Company Register

As of the day of publishing the voluntary takeover offer, neither the Bidder nor any parties actingin concert with the Bidder hold any interest in the Target Company. The bidder does, however,have a commitment agreement with Mountain Peak Trading Ltd., a shareholder of the TargetCompany.

Furthermore, the Bidder entered into a Business Combination Agreement (BCA) with the TargetCompany on 5 September 2016. Under this Agreement, the Target Company, among other mat-ters, agreed to sell the own shares in line with the public takeover offer published.

On the basis of the current shareholder ownership of the Target Company, the offer targets atakeover of up to 101,906,213 shares of the Target Company. These shares are quoted on theprime market of the Vienna Stock Exchange and represent in total a 100% stake in the nominalcapital.

The shareholders of the Target Company, which are willing to accept the offer, have the possibil-ity of being compensated in two ways: via a cash offer or via a share exchange for all or for onlypart of the shares tendered.

conwert shareholders accepting the cash offer receive EUR 16.16 for each share (incl. dividendpayments for 2016). The share exchange option gives the shareholders of the Target Companythe possibility to exchange each one of their shares against 0.496645 New Vonovia Shares.

Conwert ImmobilienInvest SE

Privateshareholders

PetrusAdvisers LLP

FIL LimitedFonds-

gesellschaften

EarnestPartners, LLC

MountainPeakTradingLimited

Institutionalinvestors

Own shares

GGJBeteiligungs

GmbH

Cicero 2Holding GmbH

ECOAnteilsverwaltu

ngs GmbH

ConwertProjektentwickl

ungFurther 25

ConwertDienstleistungund BauträgerHolding GmbH

CWGBeteiligungs

GmbH

Con value oneImmobilien

GmbH

CONWERTSecuritisation

Holding GmbH

Cicero 3Holding GmbH

GGJBeteiligungsGmbH & Co

Projekt Eins OG

Steinamangerstr. 189&191

LiegenschaftsGmbH

ECO BusinessImmobilien

GmbH

GGJ Beteiligungs

GmbH & CoProjekt Siebeni

OG


Projekt Drei OG

EpssilonAltbaudevelopm

ent GmbH

GJ BeteiligungsGmbH

EpssilonMeidlinger

Hauptstr. 27Liegenschafts

ver GmbH


Projekt Zwei OG

Sharholder Number of sharesShare of

nominal capital (in %)

Share of

voting rights (in %)

MountainPeak Trading Ltd. 26,160,921 25.67% 26.07%

FIL Investment International 7,259,798 7.12% 7.24%

EARNEST Partners, LLC 4,233,888 4.15% 4.22%

Own shares 1,576,464 1.55%

Widely spread shareholdings 62,675,142 61.50% 62.47%

Total 101,906,213 100.00% 100.00%


The offer can be accepted from 18 November 2016 until 19 December 2016. In line with § 14 sec-tion 1 TA, the Administrative Board is to submit a statement on the public offer immediately af-ter the publication of the voluntary public takeover offer. The independent expert has to evaluatethe offer and the statement of the Administrative Board. The Administrative Board has to pub-lish its statement about the offer received and the report of the independent expert no later thanten trading days after the publication of the offer and in no way later than five trading days priorto the expiration of the offer period. Therefore, the relevant publishing date is 1 December 2016,which is ten trading days after the publication of the voluntary public takeover offer.

D. Assessment of the offer document

I. Formal assessment of the offer document

As independent experts of the Target Company, we first assessed the formal completeness of theoffer in terms of § 7 TA and then reviewed whether the necessary minimum information is in-cluded and thus the offer includes the legally required content (§ 3 no. 2 TA).

1. Review of completeness of the offer document

§ 7 no. 1 TA: The offer document contains the entire legally required minimumcontent of the offer.

§ 7 no. 2 TA: The offer document includes details on the legal form, name and reg-istered office of the Bidder. The offer document further includes infor-mation on the shareholder structure of the Bidder.

§ 7 no. 3 TA: The offer relates to the purchase of a total of 101,906,213 shares of theTarget Company (ISIN AT0000697750) admitted for official tradingon the Vienna Stock Exchange (Segment Prime Market) and constitut-ing 100% of the share capital of the Target Company.

§ 7 no. 4 TA: With regard to the shares or part of the shares, the shareholders of theTarget Company, who want to accept the offer, will have the possibil-ity to choose between a cash offer, an alternative exchange offer, or acombination of both:

Cash offer: the offer price is EUR 16.16 per conwert share cumdividend 2016 and is provided in cash

Share exchange offer: the offer implies an exchange of oneconwert share for 0.496645 New Vonovia Shares

With regard to a cash offer, the pricing rules of § 26 section 1 last sen-tence TA for voluntary public takeover offers have been compliedwith.

§ 7 no. 5 TA: As this is a voluntary public takeover offer with the aim to gain controlin terms of § 25a TA, the statutory minimum acceptance level applies,which requires more than 50% of the shares with permanent votingrights to be included in the offer. Thus, the offer will only be success-ful if the offer is accepted for at least 50,953,107 shares of the TargetCompany until the end of the acceptance period (19 December 2016).


§ 7 no. 6 TA: The Bidder declares in the offer that neither the Bidder nor any par-ties acting in concert with the Bidder are holding shares of the TargetCompany at the time of publication of the offer document. Further-more, the Bidder refers to the delivery undertaking with MountainPeak Trading Ltd. and the Business Combination Agreement with theTarget Company. Consequently, the Bidder already has commitmentsfor 27,737,385 shares (i.e. around 27.22% of the share capital).

§ 7 no. 7 TA: In the offer, the Bidder sets out the conditions precedent. According to§ 19 section 1c TA, the Bidder explicitly reserves the right to withdrawfrom this offer, if another bidder presents a public offer for the TargetCompany’s shares.

§ 7 no. 8 TA: The Bidder has outlined in the offer which strategic goals the Bidder isstriving to achieve with regard to the business policies of the TargetCompany, including effects on the employment situation and the sitesaffected.

§ 7 no. 9 TA: The acceptance period is slightly over 4 weeks. The period runs from18 November 2016 to 19 December 2016 and lies within the statutoryrange of 2 to 10 weeks. The Bidder reserves the right to extend the ac-ceptance period.The Bidder explicitly refers to the fact that in case a competing offer ispublished, shareholders have the right to withdraw from their declara-tion of acceptance in accordance with § 17 TA until 4 trading daysprior to the end of the original acceptance period.

§ 7 no. 10 TA: As the offer also includes the possibility of an exchange in the form ofshares (New Vonovia Shares), it also contains a reference to a pro-spectus of the German securities regulator. This has not been re-viewed by us. The requirements concerning information in compli-ance with the Austrian TA have been met.

§ 7 no. 11 TA: The financing conditions of the offer by the Bidder are outlined in theoffer document.

§ 7 no. 12 TA inconj. with§ 1 no. 6 TA:

According to its own specifications, the Bidder has no controllingshareholder. The legal bodies controlled by the Bidder are deemedparties acting in concert with the Bidder. The offer contains infor-mation in this respect.

§ 7 no. 13 TA inconj. with§ 27a TA:

The articles of association of the Target Company do not include anyobstacles to the takeover in connection with § 27a TA.

§ 7 no. 14 TA: The offer outlines that by written acceptance of the offer a conditionalpurchase or exchange contract according to Austrian law is concluded.The place of jurisdiction will be a competent court in Vienna, InnerCity, with the only exception being consumer transactions.

II. Conditions of the offer

§ 8 TA: The offer is subject to a number of execution conditions set out inthe offer.


III. Deadlines

§ 19 section 1, 1b,1c and 2 TA:

The acceptance period runs from 18 November 2016 to 19 December2016 and is thus approximately 4 weeks, lying within the statutoryrange of 2 to 10 weeks. The Bidder reserves the right to extend the ac-ceptance period in line with § 19 section 1 TA. The notification of theresults of the takeover offer is planned to be announced immediatelyafter the end of the acceptance period in the official gazette “Amtsblattder Wiener Zeitung” as well as on the websites of the Bidder, the Tar-get Company, and the Takeover Commission.

§ 19 section 3 TA: For those shareholders who have not accepted the offer within the ac-ceptance period, the acceptance period is extended by 3 months fromthe date of announcement of the result.

IV. Transactions of the Target Company’s securities according to § 16 section 2 TA

§ 16 section 2 and7 TA:

Any statement made by the Bidder or a party acting in concert withthe Bidder before the end of the – if applicable, extended – acceptanceperiod to purchase securities that are part of the offer at better condi-tions than stated in the offer, counts as an enhancement of the offer toall shareholders holding securities that are subject to the offer. Thesame holds true in the case that the Bidder, or a party acting in con-cert with the Bidder, grants or contracts shares within 9 months afterthe end of the statutorily extended acceptance period for a considera-tion higher than the consideration offered for these securities.This subsequent payment comprises those cases in which the Biddergrants or contracts a consideration higher than the consideration of-fered for shares of the Target Company, or receives such considerationin case of a resale of a controlling interest. Explicitly excluded fromthis are cases in which the Bidder or a party acting in concert with theBidder purchases shares exercising a statutory subscription right incase of a capital increase or in which a higher consideration is deliv-ered in the course of a squeeze-out procedure.The Bidder declares in the offer not to have made a decision concern-ing a squeeze-out yet.

V. Determination of the offer price

The weighted average share prices for the last 3, 6, 12 and 24 calendar months prior to publica-tion are as follows:

Source: Share price, PwC analysis, Calculations are based on the stock rates and premiums rounded to 2 decimal places

As shown in the table above, the offer price lies clearly above the average volume-weighted shareprice in the period from 3 September 2014 to 2 September 2016.The book value of the capital per

3 months 6 months 12 months 24 months

Average price 14.54 14.20 13.46 12.22

Absolute premium 1.62 1.96 2.70 3.94

Premium in % 11.13% 13.80% 20.06% 32.27%


conwert share in the quarterly report as of 30 September 2016, is EUR 13.78. The offer price ofEUR 16.16 is thus approximately 17.27% above the book value of the Target Company’s equity.The highest share price of the Target Company’s ordinary shares over the past 24 months priorto the Bidder’s offer announcement was reached on 2 September 2016, peaking at EUR 16.145.

Pursuant to § 26 section 1 TA, the price of a voluntary offer for the purpose of gaining controlmay not be less than the highest consideration of the Bidder or a party acting in concert with theBidder, within the last 12 months before the announcement of the offer. Furthermore, the pricemust be at least equal to the average stock marketvolume-weighted share price during the lastsix months prior to the day on which the intention to make an offer was announced. In this case,this is the period from 3 March 2016 to 2 September 2016. The offer price of the Bidder for theordinary share of EUR 16.16 meets these requirements.

After a small increase of the stock market price of the Target Company’s shares due to the Bid-der’s announcement of the intention to launch an offer, the share price steadily declined sincethe end of September.

Figure 2: Performance of the Target Company’s shares from 5 September to 28 November 2016 (in EUR)

Source: Share prices, Bloomberg, PwC analysis

The offer also includes the possibility of consideration in the form of securities (New VonoviaShares). The exchange offer includes the exchange of one conwert share for 0.496645 NewVonovia Shares. The following figure compares the cash offer of EUR 16.16 to the market ex-change rate of New Vonovia Shares in the period from 2 September 2016 to 28 November 2016(calculated on the basis of the conversion ratio of 1: 0.496645). The exchange value of the offerconverted into New Vonovia Shares initially exceeded the offer price, but has fallen almost con-tinuously since the end of September.

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conwert - Share price performance 5 September 2016 - 28 November 2016

Closing price


Figure 3: Value development of the share exchange offer for the period from 2 September 2016 to 28 No-vember 2016 compared to the cash offer (in EUR)

Source: Share prices, Bloomberg, PwC analysis

E. Assessment of the offer price

I. Evaluation of the Target Company

1. Net Asset Value

In order to determine the value of a real estate company such as the Target Company it is com-mon to use its net asset value (“Net Asset Value” or “NAV”), which is calculated according tothe criteria of the European Public Real Estate Association (EPRA) (“EPRA NAV”). The NAV isbased on the company’s equity or, respectively, its net assets. When calculating the company'sassets, the fair value of the real estate assets are generally calculated by discounting future cashflows to the valuation date.

The Figure 4 below shows the historical development of the diluted EPRA NAV per share of theTarget Company over the period 2007 to the first half of 2016.

Figure 4: Development of the diluted EPRA NAV from January 2007 to 30 September 2016.

Source: PwC analysis, half year financial report

Over the analysed period, the diluted EPRA NAV per share ranged between EUR 14.86 and EUR17.03 averaging EUR 15.89. The diluted EPRA NAV per share fell sharply after reaching its peakin 2011 but experienced stable growth rates over the last years. As of 30 September 2016, theNAV stood at EUR 15.92.

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Value exhange offer Value cash offer

NAV per share as of

30 Septem ber 201 6 1 5.92

Premium to NAV 1 .51 %


The calculation of the NAV and the assessment of the offer price does not take into account thatthe Target Company is expecting valuation gains of EUR 85m to EUR 105m for the last quarterof 2016, which were announced by the Target Company on 25 November 2016. This revaluationwould probably lead to a higher NAV compared to the offer price. However, since the mentionedvaluation gains were communicated indicatively, the final valuation gains are not yet defined.

In summary, the cash offer of EUR 16.16 per share is EUR 0.24 above the NAV as at 30 Septem-ber 2016. This corresponds to a premium of 1.51%. In addition, the cash offer is also above theaverage NAV for the last nine years. It should be noted, however, that for listed companies suchas the Target Company, in addition to the NAV, other criteria for the plausibility check of thecompany value are to be considered. In addition to the historical market price development andanalyst estimates, stock market and transaction multipliers can be considered.

2. Stock market price

The following figure shows the development of the yearly average stock market price of the Tar-get Company over the period December 2007 to September 2016.

Figure 5: Development of the share price average from January 2007 to September 2016.

Source: PwC analysis, Annual reports

The 6-month volume-weighted share price ("6m-VWAP") of the Target Company’s stock as of14 November 2016 is EUR 15.73, which is EUR 0.43 below the cash offer of EUR 16.16. This cor-responds to a premium on the VWAP of 2.73%. Between 2007 and 30 September 2016, the averageshare price of the Target Company was EUR 10.40, whereas the corresponding NAV was exceededat every point in time. As possible reasons for the occasionally strong deviations, the followingpoints should be considered:

Market inefficiencies:Market inefficiencies and the overall stock-exchange sentiment can lead to over- and un-dervaluation at the market.

Different Methodologies:The valuation on the stock exchange market is determined for an entire company. Thestock market, therefore, shows current changes in the value of real estate markets orthose expected in the future faster than shown in the company’s equity. Furthermore,contrary to the NAV, the expected cash flow, dividend policy, shareholder structure, man-agement and efficiency are additionally considered within the stock market price. Withinthis context, we refer to the analysts’ reports, which in some points align changes of themanagement and the shareholder structure to their valuations.

14.21

10.24

6.10

9.13

11.27

8.90 8.90 9.35

11.79

14.09

-2468

10121416

Share perfromance in EUR

Share price

6m-VWAP 1 5.7 3

Premium to 6m-VWAP 2.7 3%


Difference in interest rates:The property yield (or discount rate/cap rate) does not necessarily correspond to the inter-est rate derived from capital markets in the calculation of the company value.

Leverage-Effect:The type of financing is not taken into account when determining the NAV. On the otherhand, the share price also reflects the effects of financing, such as liquidity and losses as aresult of rising indebtedness. Here too, we refer to analyst reports that mention the fi-nancing costs of the Target Company and therefore obviously regard them in their assess-ment of the Target Company.

3. Analysts’ assessment

Besides evaluating the historical share price, analysts’ expectations concerning the future devel-opment of the share price of the Target Company provide an additional point of orientation. Thefollowing recommendations have recently been given by independent analysts:

Erste Group, 26 August 2016 – Target Price: EUR 16.00

“Conwert achieved the best half-year result in its history; Its FFO I ("Funds from operationsbefore sales and one-off items") could be increased by 52.6% to EUR 39.4 m and its consoli-dated profit after tax tripled to EUR 74.9 m. This year, it is planned to sell EUR 300-350 m ofnon-core properties and to reinvest in real estate portfolios of core regions. The NAV per share(EPRA, basic) is now EUR 16.40, which is already above our target price of EUR 16.00. Ourcurrent recommendation is Accumulate.”

Raiffeisen CENTRO Bank, 26 August 2016 – Target Price: EUR 15.60

“Following the solid 2Q 16 results release we raised our recurring earnings (FFO I) and EPRANAV expectations over the entire forecast period. We also include all dilution effects from thetermination of the only remaining convertible bond of the group. These upgrades lead to a newtarget price of EUR 15.6 (EUR 14.70 before). We maintain our HOLD rating in absence of sig-nificant share price upside and based on our base case assumptions. Germany property acqui-sitions in excess of EUR 120m p.a. and further revaluation gains constitute the main upside riskfactors.”

Baader Helvea, 25 August 2016 – Target Price: EUR 18.00

“We increase our TP by 29% to EUR 18 and change our recommendation from Hold to Buy asthe company continuously delivers on its targets regarding streamlining its portfolio shown bycurrent disposal volumes, vacancy reduction in its core markets and acquisitions. We also in-creased our overall estimates regarding valuation, FFO and DPS.We now expect a higher total shareholder value return of 7.2% and a higher dividend yield of~3.7%; and we changed our valuation model configuration due to the current interest environ-ment. At our new TP of EUR 18 conwert offers an attractive total return potential of 23%.”


Kepler Cheuvreux, 25 August 2016 – Target Price: EUR 17.50

“Conwert made good progress in its portfolio repositioning, as it managed to sign non-coredisposals of EUR142m (EUR300-350m targeted for 2016) and acquisitions of EUR90m by Au-gust. With a filled acquisition pipeline and a reported 44.6% LTV, it is well positioned to growthe company again. Cost savings of EUR 8m and additional upside to still high financing costs(2.27%) create decent FFO upside. We increase our FFO per share forecasts by 7-8% for 2016-18E and raise our target price from EUR15.50 to EUR 17.50.”

Deutsche Bank, 24 August 2016 – Target Price: EUR 19.00

“We maintain our Buy rating and raise our TP slightly from EUR 18.50 to EUR 19.00. We raiseour FFO forecast by 16 percent this year as the restructuring is progressing faster than ex-pected. Downside risks: 1) Tighter German rent regulation; 2) Unexpected restructuring one-offs; 3) M&A.”

Oddo Seydler, 24 August 2016 – Target Price: EUR 17.00

“Based on the ongoing operational improvement and cost structure enhancement, we reiter-ate our Buy recommendation and lift our TP to EUR 7.00 from EUR 16.50. Our new TP ofEUR 17.00 translates to a small premium of 2.5% to our 2016e fully diluted EPRA NAVPS ofEUR 16.58 while the average peer group premium is ~20-25%. Our TP also results in a 2016eP/FFO I multiple of ~22x, which is within the bandwidth of ~20-30x for Deutsche Wohnen,LEG Immobilien, and Vonovia.”

SRC, 24 August 2016 – Target Price: EUR 16.00

“We maintain our Buy rating and lift our TP up to EUR 16.00 (EUR 15.50 before) as conwertagain lifts FFO guidance after very good 1H results with tripling the bottom line and +53% atFFO I.”

The analysts estimate a value range of EUR 15.6o to EUR 19.00. The cash offer of the Bidder liesin the lower third of the value range.


Figure 6: Bandwdith of the share prices according to analysts’ estimates

Source: PwC analysis, analyst reports

4. Multipliers of comparable listed companies (Stock market multipliers)

When conducting company valuations, multipliers are commonly used as indicators forcomparable companies of the same sector and applied on the company to be assessed. The entityvalue can then be conducted by comparison with similar companies (the so-called “peer group”).The peer group usually consists of companies that operate in the same sector and, furthermore,have a comparable business model. In particular, it has to be ensured that peer group companiesoperate in a similar target market and display a similar profitability. The regional positioning ofthe Target Company, focusing on Austria and Germany, reduces the possible peer companies ofthe same sector accordingly.

It should be noted that virtually no company is completely comparable with another company.The result of the multiplier evaluation should therefore be regarded as a range of possible valuesin which the valuation result should be found.

Based on information from the financial database provider Capital IQ, we have compiled a list ofcompanies that have been filtered according to the criteria shown in the chart below.

Figure 7: Selection criteria for peer group identification

Source: PwC analysis, Capital IQ

1 5.60 1 9.00

5 10 15 20 25

Analysts' reports

V alue per conwert share (EUR)

Value range as per analy sts'reports

ca sh offer: EUR 16.16

6 Peer Group Companies

1. Selection:

● Peer Group derivation Capital IQ

● Focus: Austria, Germany, Luxembourg

● Balance sheet: EUR 1,5bn – EUR 7,0bn


2. Selection:

● Market capitalization: > EUR 1bn


3. Selection:

● Qualitative exclusion of companies withdifferent investment strategies and

portfolios (eg. primarily commercialportfolios)

Screening criteria:


By applying the criteria mentioned above, the following six peer group companies can bederived:

BUWOG GROUP, Vienna, Austria TAG Immobilien AG, Hamburg, Germany Deutsche Wohnen AG, Frankfurt am Main, Germany LEG Immobilien AG, Düsseldorf, Germany Vonovia SE, Düsseldorf, Germany Grand City Properties S.A., Luxembourg, Luxembourg

In the context of a comparative market assessment, multipliers based on different success factorscan be applied.

As part of the valuation, the following multipliers were used:

Price-net asset value-multiplier (P/NAV) Price-funds from operations-multiplier (P/FFO) (the FFO describes the generated cash

flow from the operative business) Enterprise value/EBITDA-multiplier (EV/EBITDA) (principally neutralises the capital

structure and is able to compensate differences arising from investment behaviour.)

We have determined the multipliers for the selected peer group for the years 2015 and 2016 (seebelow). We then applied these to the corresponding key figures of the Target Company. The keyfigures for 2016 are based on the quarterly report of the Target Company as of 3 September2016. We have extrapolated these for the full year to be able to derive the correspondingbandwidths for the company value.

Source: PwC analysis, Capital IQ, quarterly reports

The results show a range of EUR 12.04 to EUR 19.83 per share. The cash offering of the bidder ofEUR 16.16 lies in the upper third of the derived range.

Figure 8: Value bandwidths trading multipliers

Source: PwC analysis, Capital IQ, quarterly reports

Peers P/NAV P/FFO EV/EBITDA P/NAV P/FFO EV/EBITDA

BUWOG AG n.a. 30.4 x 33.4 x n.a. 29.9 x 37 .2 x

TAG Im mobilien AG 1 .0 x 1 8.9 x 1 0.9 x n.a. 1 7 .7 x 1 1 .0 x

Deutsche Wohnen AG 1 .0 x 28.5 x 28.4 x 1 .0 x 23.5 x 28.3 x

LEG Immobilien AG 1 .2 x 22.9 x 29.6 x 1 .1 x 1 5.9 x 24.7 x

Vonov ia SE 1 .0 x 21 .9 x 30.7 x 1 .0 x 1 8.6 x 25.6 x

Grand City Properties S.A. 1 .2 x 23.0 x 26.8 x 0.7 x 1 5.0 x 20.9 x

Median 1.0 x 23.0 x 29.0 x 1.0 x 18.1 x 25.1 x

Multiples 2016Multiples 2015

13.71

1 2.04

13.98

1 9.83

1 4.66

1 5.82

5 10 15 20 25

EV/EBITDA

P/FFO

P/NAV

Value of conwertshare (EUR)

Value range as per trading m ultiples

ca sh offer: EUR 16.16


5. Multipliers of comparable transactions (transaction multipliers)

In order to evaluate the company through transaction multipliers, it is necessary to screen pastpublic acquisitions of companies or shares on such companies, which are characterized by beingin a similar situation to determine a comparative range of effectively paid prices.

In the case of transaction multipliers, it must be borne in mind that the purchase price actuallypaid is largely determined by the subjective interests of the transaction partners. For instance,they take into account synergy effects and subjective expectations.

We have created a list of transactions based on information from the Mergermarket database.This was filtered according to the criteria listed in the figure below:

Source: PwC, Analysis, Capital IQ

By applying the 3 selection criteria given above, the following four comparative transactions canbe identified:

Acquisition of a 26% share of CA Immobilien Anlagen AG (Vienna, Austria) byImmofinanz AG (Vienna, Austria), announced on April 18, 2016;

Acquisition of 100% of the shares of DO Deutsche Office AG (Cologne, Germany) byalstria office REIT-AG (Hamburg, Germany), announced on 16 June 2015;

Takeover of 100% of the shares of GAGFAH S.A. (Luxembourg) by Vonovia SE(Düsseldorf, Germany), announced on 1 December 2014;

Takeover of 100% of the shares of GSW Immobilien AG (Frankfurt / Main, Germany) byDeutsche Wohnen AG (Düsseldorf, Germany), announced on August 20, 2013;

5 Comparable transactions

1. Selection:

● Region: Europe

● Sector / Subsector: Real Estate


2. Selection:

● Deal size: >EUR 1bn


3. Selection:

● Sub-region: Austria, Germany, Luxembourg

Screening criteria:


Comparable transactions EV/ EBITDA

CA Immobilien Anlagen AG (26% Beteiligung) - Immofinanz AG 23.3 x

DO Deutsche Office AG - alstria office REIT-AG 1 0.0 x

GAGFAH S.A. - Vonov ia SE 25.0 x

GSW Immobilien AG - Deutsche Wohnen AG 1 7 .9 x

Median 20.6 x

The multipliers of the comparative transactions are shown in the table below. Due to the lack ofpublic information, contrary to the stock exchange multipliers, we only used the EV / EBITDAmultiplier.

Source: PwC analysis, Mergermarket

Based on the multiplier mentioned above, the value for the Target Company ranges from EUR9.11 to EUR 10.22 per share. The cash compensation offered by the Bidder is clearly above thisrange.

Figure 9: Value bandwidth transaction multipliers

Source: PwC analysis, Capital IQ

In addition, we have calculated the implied selling prices for the four transactions based on the6m VWAP, as well as the last exchange rate, before the announcement date of the transactionpremiums. Two transactions represent an offer, one a pure cash offer and one a combination of acash and share exchange offer.

Source: Mergermarket, Capital IQ, company information

6. Limited assessment of the fairness opinion provided by J.P. Morgan

J.P. Morgan AG, Frankfurt am Main (“J.P. Morgan”) was mandated by the Target Company toprovide a fairness opinion to the cash offer of the Bidder. J.P. Morgan performed a valuation ofthe company’s value, applying commonly used valuation methods.

However, we would like to point out that we did not undertake an in-depth examination of J.P.Morgan’s fairness opinion, as we did neither analyse the business plan for its plausibility, nor theindividual assessment parameters. However, it should be noted that J.P. Morgan, based on theinformation provided, came to the result that the Bidder’s cash offer was adequate at the relevantvaluation date.

9 .11 1 0.22

5 10 15 20 25

EV/EBITDA

Value per conwert share (EUR)

Value range as per com parable transactions

cash offer: EUR16.16

Target company Bidder Type of offer Announcement date 6m VWAP

Premium to

6m VWAP Share price

Premium to

share price

CA Immobilien Anlagen AG

(26% Beteiligung) Immofinanz AG cash offer 1 8.04.201 6 1 6.55 42.03% 1 7 .44 3 4.7 5%

DO Deutsche Office AG alstria office REIT-AG share exchange 1 6.06.201 5 3.30 35.20% 4.02 9.7 1 %

GAGFAH S.A. Vonov ia SE mix 01 .1 2.201 4 1 3.97 23.7 7 % 1 5.52 1 5.98%

GSW Immobilien AG Deutsche Wohnen AG share exchange 20.08.201 3 n.a. n.a. 31 .46 1 4.7 8%


7. Summary

To conclude, it should be noted that the Bidder’s cash offer of EUR 16.16 is either significantlyabove or at least in a plausible range of relevant benchmarks for the value of the TargetCompany. In particular, the cash offer is above the NAV as of 30 September 2016. Inconsideration of all factors mentioned, we therefore consider the Bidder’s offer as economicallyappropriate on the relevant valuation date.

Figure 10: Value range summary

Source: PwC analysis

F. Presentation of the company’s bodies

The Administrative Board of the Target Company consists of the following persons:

Dr. Alexander ProschofskyPeter HohlbeinMag. Erich KandlerDr. Dirk HoffmannAndreas Lehner

Furthermore, the following persons are managing directors of the Target Company:

Dr. Wolfgang BeckMag. Thomas Doll

The Target Company is a monistic SE, in which the Administrative Board leads the company.The Target Company itself does not have a works council. Accordingly, only the board of the Tar-get Company will make and publish an opinion on the offer pursuant to § 14 TA.

Value ranges

T ransaction

multiple

A nalysts` estimates

T rading

multiples

1 5.60

9 .11

13.71

1 2.04

13.98

1 9.00

1 0.22

1 9.83

1 4.66

1 5.82

5 10 15 20 25

EV/EBITDA

EV/EBITDA

P/FFO

P/NAV

V alue per conwert share (EUR)

xca sh offer: EUR16.16


G. Statement of the Administrative Board

In particular, according to § 14 section 1 TA, the statement of the Administrative Board of theTarget Company has to contain the following:

an assessment whether the offered consideration and the other content of the offeringrepresent the interests of all shareholders and which effects the offer might have on theTarget Company and, especially, the employees, the creditors and the public interest

if the Administrative Board is not in a position to issue a final recommendation, it mustin any case provide relevant arguments for the acceptance or rejection of the offer

The Administrative Board issued a statement pursuant to § 14 section 1 TA on 29 November2016, regarding the Bidders’ offer. In this statement the Administrative Board in particular re-fers to the following points:

In this context, the Board notes that the cash offer price of EUR 16.16

exceeds the weighted average rates of the last 6 calendar months (EUR 14.20) lies above the average rates of the last 3, 12 and 24 months prior to publication of the an-

nouncement of the intention to launch an offer.

Figure 11: Offer prices in relation to the share prices of the Target Company (in EUR) until 2 September2016

Source: Annual reports conwert Immobilien Invest SE, PwC analysis

In this context, the Administrative Board points out that there is no statutory requirementfor the value of the exchange offer. Measured at the fair value of the Vonovia share on 2September 2016, the exchange offer (one conwert share against 0.496645 New VonoviaShares) represents a premium of 23.80% compared to the VWAP of the last 6 months ofthe Target Company prior to publication of the intention of a bid (EUR 14.20). Accordingto the offer document, the New Vonovia Shares are entitled to dividends as of 1 January2016, payable 2017.

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Yearly highest price Yearly lowest price 6m- VWAP12m- VWAP 24m- VWAP 3m- VWAPCash offer


Assessment of the other content of the offer

The Administrative Board of the Target Company has confirmed to us that it has not recognisedany information in the offer, as far as it can judge, that could lead to doubts about the correct-ness and completeness of the offer and the information contained therein.

Impact of the offer on the Target Company

In its opinion, the Administrative Board notes a number of possible impacts that may result fromthe offer or the new ownership structure of the Target Company:

The Bidder could have more than 75% of the share capital and the voting shares of theTarget Company after a successful bid, which would entitle the Bidder under companylaw to decide on structural and capital-related measures alone at the general meeting ofthe Target Company

According to the Bidder, no delisting is currently planned Through the integration of the Target Company, the Bidder expects an increase in sy-

energy potentials by:o Takeover of the administration and management of German real estate by the

Biddero Modernisation of the stocko Extending the value chaino Optimisation of cost structures

Impact on workers (regarding their jobs, employment conditions and locations)

The Administrative Board of the Target Company also refers to the expected effects of the offeron the employees regarding employment, employment conditions and future of locations. In thecourse of the integration of the real estate operations of the Target Company into those of theBidder, it is considered to combine current structures especially in Germany. Otherwise, the Bid-der currently does not see any concrete need for changes in the employment situation.

Due to good positioning and because the Bidder currently does not have a branch in the Austrianmarket, the Target Company will continue to be present on the Austrian market, which was stip-ulated in the BCA. The BCA also includes a continuation of the conwert Group's activities in thearea of residential properties, including the Austrian residential property portfolio as well as thecontinuation of the existing non-core sales activities.

Impact on creditors and public interest

The Administrative Board of the Target Company also refers to the expected impact of the offeron creditors and the public interest. Against the background of strategic planning of the Bidder,the Administrative Board does not recognise any adverse effects of the offer on creditors.Changes that affect the public interest at large have not been identified.

The Administrative Board of the Target Company issues a recommendation to accept the offer.However, it also points to the basic individual assessment of each shareholder and the underly-ing single-point estimations of future developments in the capital market and the real estate sec-tor. Furthermore, the Administrative Board refers to the offer regarding the complexity of theAustrian tax law and recommends that conwert shareholders should consult with their tax repre-sentatives on the tax consequences of accepting the cash offer or exchange offer.


H. Explanation of the arguments for accepting or rejecting the Offer

The Administrative Board’s statement outlines the arguments for accepting the offer. Hereafter,these arguments will be briefly described and to some extent explained further by conducting ad-ditional analyses.

The main arguments for accepting the offer can be summarised as follows (the number-ing is based on the numbering as found under point 9.1. statement of the AdministrativeBoard)

a) Cash offer is higher than the net asset value

As shown in the following figure, since 4 May 2007, the stock market price has been con-stantly below the NAV communicated by the Target Company.

Figure 12: NAV per share in relation to stock market prices of Target Company since 2007 (in EUR)

Source: Capital IQ, annual reports conwert, PwC analysis

b) Fairness Opinion considers the offer as financially adequate

The Administrative Board refers to JP. Morgan’s Fairness Opinion, which has been car-ried out following common international valuation practices. We have not performed anin-depth analysis with regards to the Fairness Opinion.

c) The bid price is higher than the average share price (weighted by the respectivetrading volume) of the last 3, 6, 12 and 24 months

The Administrative Board points out that the bid offer is higher than the average shareprice (weighted by the respective trading volume) of the last 3, 6, 12 and 24 months pre-ceding the announcement of the intention to launch an offer (see figure under Point h).


d) Cash offer is higher than the offer from 2015

In March 2015, Deutsche Wohnen AG placed a voluntary bid to acquire a controlling in-terest pursuant to § 25a TA at a price of EUR 11.50 per conwert share. The offer was ulti-mately unsuccessful. The cash offer by the Bidder is 40.52% above the past offer ofDeutsche Wohnen AG.

e) Sale of high quantities without affecting the share price

In the past, relatively low daily trading volume led to a stock price. In the last few years,the highest daily turnover on the stock market was only a fraction of the total volume tobe achieved by the offer. Therefore, a transaction of large quantities of shares without amassive impact on the stock price appears unlikely to occur on the stock market.

Figure 13: Development of stock market prices and volume of the Target Company (inEUR)

Source: Share prices, PwC analysis

f) Declining free float

The following chart shows the average number of traded shares of the Target Companyper day in each of the last 11 quarters. In addition, the proportion of the total stock ofshares of the Target Company, which was traded on an average daily basis in the respec-tive quarter, is listed. Except for the first half of 2015, the number of shares traded dailywas below 0.5% of the total number of shares. The higher value in the first half of 2015can be explained by the transactions performed at the time of Deutsche Wohnen AG'stakeover offer.

Figure 14: Average traded volume of the Target Company (in number of shares)

Source: Share prices, PwC analysis

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2,000,000

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conwert - Share price performance 2 January 2014 - 2 September 2016

Volume Closing price

324,436366,235

252,999 272,788

640,694590,950

391,458 407,049483,498

275,555

428,113

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100,000

200,000

300,000

400,000

500,000

600,000

700,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 (until 2September)

2014 2015 2016

Volume traded (in average)

Volume traded (in average)

0.38% 0.43% 0.30% 0.32%

0.75% 0.69%

0.46% 0.47%0.52%

0.29%

0.45%

average volume traded in comparison tonumber of shares issued


g) Uncertainty with regard to the shareholder structure in case of an unsuccessfuloffer

The Administrative Board points out that it is not foreseeable how the shareholder struc-ture of the Target Company will develop or change in case an unsuccessful offer. The offerprovides a foreseeable, clear shareholder structure. The Target Company already was thesubject of a takeover attempt in 2015. In case of the failure of this takeover procedure, itis not foreseeable whether there would be another attempt to take over the Target Com-pany, and if so, by whom and in particular of which conditions.

If another takeover offer is published during the course of the present proceedings, itshould be noted that pursuant to § 17 TA, shareholders can withdraw from declarations ofacceptance already issued.

h) Uncertainty with regard to future business development

As demonstrated in the Figure 15 below, the average rental income in the core portfolio ofresidential and commercial properties has risen steadily in both Austria and Germany.The interest rate level in Austria as well as in Germany has declined steadily in recentyears. According to the Administrative Board, this has also contributed to rising prices inthe real estate sector.

According to Bloomberg, the share price level of the bidder expected by analysts was EUR36.39 on 2 September 2016. Until 23 November 2016, this figure rose to EUR 37.09.

Figure 15: Development of the average rental prices of the Target Company in the core portfolio ofresidential and commercial properties in Austria and Germany (in EUR/m2/month)

Source: conwert Immobilien Invest SE, PwC analysis

5.20

5.40

5.60

5.80

6.00

6.20

6.40

6.60

2014 2015 2016

AUT core residential portfolio GER core residential portfolio

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2.00

4.00

6.00

8.00

10.00

12.00

14.00

2014 2015 2016

AUT premium commercial portfolio GER premium commercial portfolio


Figure 16: Interest rate level of German government bond

Source: Deutsche Bundesbank, PwC analysis

The following aspects must also be taken into account when considering theexchange offer:

i) Possibility of participating in an increase of the Bidder’s share price by realisingsynergy potentials and

j) Investing in the biggest residential real estate company in Germany

According to the Bidder, Vonovia is the largest German housing company in the privatesector in terms of market value of the portfolio and the number of residential units. At aninternational level, Vonovia is the second largest listed real estate company in continentalEurope, measured by the portfolio's value.According to the Bidder, acquisitions are constantly made in order to increase the valuefor the shareholders by leveraging on economies of scale and synergies. During the 2015financial year, GAGFAH and SÜDEWO were acquired and in the years before, acquisi-tions of DeWAG, Franconia and the Vitus Group were carried out.

Due to an comprehensive acquisition strategy of the past, the leveraging of synergy po-tentials seems very likely. Hence, the acceptance of the exchange offer opens up the pos-sibility to leverage on future synergies.

k) New Vonovia Shares eligible for dividend

In its statement, the Administrative Board points out that the New Vonovia Shares arefully eligible for a dividend. At the same time, shareholders accepting the exchange offerforgo dividends distributed by the Target Company.

With regard to the amount of dividend expected by the Administrative Board, it shouldbe noted that the dividend level is not fixed, but based on current expectations publishedby the company.

0.00%

0.50%

1.00%

1.50%

2.00%

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l) The expected increase in rental income of the Bidder for 2017 exceeds that of theTarget Company

Growth forecasts with regard to rental prices in the first 3 quarters of 2016 have beenstated in both, the Bidder’s and the Target Company’s reports and presentations.The Bidder has explicitly disregarded any effects arising from the takeover of the TargetCompany. In the analysts' presentation of 3 November 2016, an increase between 3.5 and3.7% is reported.

In its presentation of results of the first 3 quarters 2016 on 23 November 2016, the TargetCompany announced an expected increase in rental prices by 3%.

m) The rating of the Bidder exceeds that of the Target Company

According to Standard & Poor's, the Bidder's investment grade is higher than that of theTarget Company. The corresponding opinion of the rating agency was published on 6September 2016, which is after the announcement of the Bidder’s intention to launch anoffer.

The main arguments for declining the offer can be summarised as follows

a) Waiver of potential price gains because of a positive development of the TargetCompany’s share

The development of the Target Company’s share price shows a steady upward tendencysince the beginning of 2013 as demonstrated in the figure below. Currently the cash offeris below the closing price of the Target Company on 28 November 2016 (EUR 16.18) andbelow the maximum price of FY 2016 (EUR 17.39) as of September 5, 2016.

On current trends, price gains and any dividends would be waived. The analysts' reportsindicate as well that the share price of the Target Company could still rise in the future. Ashareholder would forego these price gains by accepting the Bidder's offer.

Figure 17: Stock price performance and volume traded (in EUR)

Source: conwert Immobilien Invest SE, Bloomberg, PwC analysis

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conwert - Share price perfromance 2 January 2014 - 28 November 2016

Volume Closing price


b) Attainment of synergies by holding shares of Target Company

In its statement, the Administrative Board points out that synergies between the Bidderand the Target Company are possible. In case the Bidder's offer is successful, sharehold-ers who do not accept the offer and remain shareholders of the Target Company couldbenefit from these synergies.

c) Restrictions with regard to trading of shares

According to the offer document, the shares of the Target Company submitted for sale orexchange are not tradeable until the offer is settled.

Due to the necessary preparatory steps for the execution of the offer, as set out in the of-fer document (the fulfilment of the conditions precedent), the day of settlement of the of-fer may be delayed until 3 March 2017. This would normally support the argument of alate acceptance of the offer. At the same time, however, pursuant to § 25a TA, the mini-mum acceptance threshold of more than 50 per cent has to be reached by the end of theoriginal acceptance period (19 December 2016); otherwise the offer fails.

In addition, the following aspects must be taken into account when con-sidering the exchange offer:

d) The share price of the Bidder has fallen since the offer was published

As demonstrated in the following figure, the share price of the Bidder has declined sincethe beginning of September 2016 and, therefore, since the intention to launch an offerwas published. While the Vonovia share was at EUR 35.40 on 2 September 2016, theclosing price was only EUR 30.99 on 28 November 2016, thus it declined by 12.47%.Across the entire year 2016, the share price of EUR 27.61 has risen by approximately12.24%.

Figure 18: Development of the stock exchange prices of the Bidder from 2 September 2016 to 28November 2016 (in EUR)

Source: Capital IQ, PwC Analysis

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Vonovia - Share price performance 2 September 2016 - 28 November 2016

Closing price


Figure 19: Development of the stock exchange prices of the Bidder from 4 January 2016 to28 November 2016 (in EUR)

Source: Capital IQ, PwC analysis

The decline in the share price of the Bidder has a negative effect on the exchange offercompared to the cash offer. As shown in figure 3 under section V ("Determination of theoffer price") on page 10, the value of converted shares of the Target Company in NewVonovia Shares has been mostly below the offer price since the beginning of October.

e) Increased risk for Bidder's investment portfolio possible

The Administrative Board points out that the risk profile of the Target Company coulddiffer from the risk profile of the Bidder. Therefore, shareholders who accept the ex-change offer assume the risk of future price developments of the Bidder’s share. In thiscontext, the Administrative Board draws attention to the prospectus which the Bidder hasprepared in connection with the issuance of the New Vonovia Shares, which will be usedfor the exchange. However, the Administrative Board points out that an assessment of therisks associated with an investment in shares of the Bidder cannot be made. As independ-ent experts appointed by the Target Company, we are not making an assessment of thisprospectus too.

f) Development of the Bidder’s share price uncertain

As demonstrated in Figure 20, a general statement concerning the development of theshare price of the Bidder is difficult.Although the share price has developed positively over the last two and a half years, it hasalso repeatedly experienced setbacks (in some cases severe). In particular, expected salesresulting from processing the takeover procedure and the exchange offer (e.g., the ac-ceptance of the exchange offer by certain U.S. shareholders or the sale of the share frac-tions as described in the offer) may have an effect on the Bidder’s share price.

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Figure 20: Development of the stock exchange prices of the Bidder from 2 January 2014 to 28 No-vember 2016 (in EUR)

Source: Capital IQ, PwC analysis

g) Additional costs for the US-based shareholders

The Administrative Board highlights special regulations contained in the offer documentimplying that US-based shareholders will receive their sales proceeds only after the set-tlement.

h) Pre-payment risk at exchange

The Administrative Board points out that due to the complexity of the exchange proce-dure described in the offer involves a pre-payment risk and that the consideration is notpaid simultaneously.

i) Restricted on the spot tradability of New Vonovia Shares possible

The Administrative Board points out that in case the authorisation of New VonoviaShares delays in time and therefore disadvantages regarding tradability might occur.Shareholders who have accepted the exchange offer may therefore be in a situation wherethey cannot react to market movements by selling New Vonovia Shares.

j) Costs from the recovery of possible share tops

The offer document describes how share tops from non-round share ratios are used in theform of New Vonovia Shares. Shareholders who accept the exchange offer may incur anyadditional costs resulting from the recovery of share tops which are not directly traded bythemselves.

k) Timely issue of the New Vonovia Shares is jeopardized under certain circum-stances

Upon acceptance of the exchange offer, it is not entirely ruled out that the New VonoviaShares will not be issued by the Bidder before the 2017s’ Annual General Meeting andthus shareholders' rights cannot be exercised. In this case, the shareholders cannot exer-cise their voting rights in respect of these shares and not benefit from dividend rights.

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I. Shares held by the Administrative Board of the Target Company

On 29 November 2016, the members of the Administrative Board and the Board of Directorsprovided us with the following information regarding the shares they hold in the Target Com-pany:

From a current perspective, Dr. Proschofsky will accept the offer.Mr. Hohlbein and Mr. Kandler will accept the offer.Mr. Hoffmann and Mr. Lehner do not hold shares in the Target Company.Dr. Beck and Mr. Doll will accept the offer.

J. Assessment of the opinion of the Administrative Board

On 29 November 2016, the Administrative Board of the Target Company made a recommenda-tion to accept the cash offer. In addition, arguments for or against the acceptance of the offerwere presented.

In the course of our activity as independent expert of the Target Company we have analysed thestatement of the Board of Directors. In our opinion, the arguments put forward for or against theacceptance of the offer are conclusive and appropriate to enable the shareholders of the TargetCompany to make an independent assessment whether to accept or reject the offer.


K. Conclusion of the assessment

As a result of our activity as independent experts according to § 13 TA we express the followingassessment regarding the statement of the Administrative Board of the Target Company accord-ing to § 14 TA on the voluntary public takeover offer in accordance with § 25a TA by Vonovia SEon the purchase of up to 101,906,213 shares of conwert Immobilien Invest SE:

We consider the offer submitted by the Bidder to be in compliance with applicable law. The in-formation about the economic situation of the Target Company contained in the offer documentis in accordance with the documents and information presented to us. The Administrative Boardof the Target Company recommends to accept the cash offer and in its statement sets out argu-ments for and against an acceptance of the offer.

We find the arguments presented by the Administrative Board for and against an acceptance ofthe offer plausible, transparent and conclusive. In our opinion, they are appropriate to make anassessment of the offer by shareholders of the Target Company.

The offer price of EUR 16.16 per share exceeds the average market price of the shares (with therespective weighted trading volumes) during the last 6 months before publication of the Bidder’sintention to launch this offer. The offer price lies above the closing rate of EUR 16.15 of 2 Sep-tember 2016, the last trading day before the publication of the Bidder’s intention to launch thisoffer. The offer price lies within a value range per share derived by means of multipliers of com-parable listed companies and transactions. Based on the information provided to us and theanalyses performed by us, we consider the offer price of EUR 16.16to be appropriate.

Dr. Christine Catasta Mag. Miklós RévayAuditor

PwC Wirtschaftsprüfung GmbH

Vienna, 30 November 2016

This is an English convenience translation of the German ...€¦ · Independent expert report according to §§ 13 f Takeover Act (TA) of the voluntary public takeover offer with

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